ECB in denial - or just looking for the EUR to do the monetary easing?

ECB comments post the 50 BP cut declaring that this cut is discounting further Eurozone weakness and that the March ECB meeting is the next stop is an invitation to sell the Eur.
It does not seem like the ECB will do anything until then.

Still behind the curve, still modelling the interestrate policy on Germany, leaving the PIGS countries out in the cold.
Perhaps the ECB is accutely aware of what they are doing? Perhaps they calculate on the Euro collapsing on the back of it, easing monetary conditions in the process?
Or are they counting on the yield differential to net the effect out and stabilise the currency?
Well, if they are counting on the former, at least, I believe they will be proven right.

No big shakes in the FX market right now. With the market being short Eur, there might even be an attempt to shortsqueeze it as Euro interest rate yields are pushed higher in the front end.
Perhaps this will also provide a short reprieve for Jpy related flows due to the adjusted yield curve shape, but it should be a temporary one. The Market will most likely become increasingly concerned with the ECB;s ignorance of the Euro zone current economic condition.
The net effect over the next few weeks should be negative for the Eur.
This does NOT bode well for assetmarkets going forward.
I will be selling any short squeeze rallies on bank stocks and the Eur.










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